Earnings season isn’t over just because most of the Magnificent 7 has reported. There are hundreds of companies still expected to report this week. We are starting to get some of the mid-cap and small-cap companies reporting. And
Alibaba Group Holding Limited’s BABA first-quarter fiscal 2024 results, slated for release on Aug 10, are expected to reflect the impacts of its expanding cloud computing business.The cloud segment has turned out to be one of the
China-based technology giant Alibaba (
NYSE:BABA
) will report its financial results for the June-ended quarter (Q1) on Thursday, August 10. While the softer consumption trends and increased competitive headwinds could continue to hurt its prospects, easier year-over-year comparisons will likely support its growth.
During the previous quarter’s conference call, the company revealed that it witnessed a gradual recovery in consumption trends in China. However, consumer confidence and spending power need further momentum. In addition, Alibaba’s management highlighted that the competition continues to remain fierce “among the multiple consumption platforms.”
On July 10,
Citi analyst Alicia Yap reiterated a Buy on BABA stock and increased the price target to $149 from $144. The analyst expects easier year-over-year comparisons, higher gross merchandise volume at Taobao and Tmall, and promotions to support Alibaba’s Q1 results despite the low pace of recovery in consumption.
Against this backdrop, let’s delve into analysts’ consensus estimates for Q1.
Here’s What Alibaba’s Consensus Estimates Indicate
Wall Street analysts expect Alibaba to post revenue of $31.29 billion in the June-ended quarter compared to $31.08 billion in the prior-year period. The consensus estimate shows only a marginal improvement in Alibaba’s top line as a slow recovery, heightened competition, and uncertainty in the Cloud business continues to pose challenges.
Nonetheless, an improvement in sales will likely cushion its bottom line. Analysts expect Alibaba to deliver
earnings of $2.03 per share compared to EPS of $1.75 in the prior-year period. Further, the consensus estimate indicates a quarter-over-quarter improvement in its bottom line.
Is Alibaba a Good Stock to Buy Now?
Unlike its technology peers in the U.S., Alibaba stock has not participated in this year’s recovery rally. However, analysts remain upbeat on Alibaba stock ahead of Q1 earnings.
With 13 out of 14 analysts recommending a Buy on Alibaba stock, it has a Strong Buy consensus rating. The
average BABA price target of $142.71 implies 51.46% upside potential.
Options Traders Expect a 6.02% Earnings-Related Move
Options traders are pricing in a +/- 6.02% move after BABA’s earnings report, which is greater than the previous quarter’s earnings-related move of -5.41%. The anticipated earnings move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Learn more about TipRanks’ option tool
here.
Disclosure
Below is Validea's guru fundamental report for ALIBABA GROUP HOLDING LTD - ADR (BABA). Of the 22 guru strategies we follow, BABA rates highest using our Growth Investor model based on the published strategy of Martin Zweig. This strategy looks for growth stocks with persistent a
For Immediate ReleaseChicago, IL – August 9, 2023 – Stocks in this week’s article are Alibaba Group BABA, Encompass Health EHC, Molson Coors Beverage TAP, Ford Motor F and Albemarle Corp. ALB.
Alibaba Group Holding Limited BABA is scheduled to report first-quarter fiscal 2024 results on Aug 10.For the fiscal first quarter, the Zacks Consensus Estimate for revenues is pegged at $30.79 billion, which suggests a rise of 0.
Once a Wall Street darling, Alibaba (NYSE: BABA) has been a problem child for most investors over the last three years. A series of setbacks, including the calling off of Ant Group's IPO and muted growth, has set Alibaba's stock for a spiraling decline, down more than 70% from i
Alibaba Group Holding (BABA) runs the largest e-commerce website in China and is scheduled to report earnings Thursday, August 10th, before the market open.
One of China's most prolific growth stocks will be reporting fresh financials this week. A lot is riding on what Alibaba Group (NYSE: BABA) has to say when it announces its fiscal first-quarter results a couple of hours before the market opens on Thursday morning.The e-commerce g
In a market dealing with external shocks, value investing is fast gaining popularity. The success of value investors like Warren Buffett underscores this. Buffett and his business partner, Charlie Munger, managed to register more
Wall Street was set to open lower on Tuesday with financial stocks dropping after Moody's overnight cut credit ratings of several small- to mid-sized U.S. banks and said it could downgrade some of the country's biggest lenders.
Below is Validea's guru fundamental report for ALIBABA GROUP HOLDING LTD - ADR (BABA). Of the 22 guru strategies we follow, BABA rates highest using our Growth Investor model based on the published strategy of Martin Zweig. This strategy looks for growth stocks with persistent a
U.S. stock index futures fell on Tuesday, with financial stocks edging lower after Moody's overnight cut credit ratings of several small- to mid-sized U.S. banks and said it could downgrade some of the country's biggest lenders.
U.S. stock index futures slipped on Tuesday, with financial stocks edging lower after Moody's overnight cut credit ratings of several small- to mid-sized U.S. banks and said it may downgrade some of the nation's biggest lenders.
Below is Validea's guru fundamental report for ALIBABA GROUP HOLDING LTD - ADR (BABA). Of the 22 guru strategies we follow, BABA rates highest using our Growth Investor model based on the published strategy of Martin Zweig. This strategy looks for growth stocks with persistent a
Chip makers continue to face headwinds in certain end markets, mainly the PC market. Nonetheless, investors are upbeat about several chip stocks due to the demand induced by the growing interest in generative
artificial intelligence (AI) applications. We used
TipRanks’ Stock Comparison Tool to place Intel (
NASDAQ:INTC
), Advanced Micro Devices (
NASDAQ:AMD
), and Qualcomm (
NASDAQ:QCOM
) against each other to find the most attractive
chip stock as per Wall Street analysts.
Intel (NASDAQ:INTC)
Chip giant Intel impressed investors last month with its
better-than-anticipated Q2 2023 results and third-quarter outlook. The company’s
Q2 2023 revenue fell 15% year-over-year to $12.9 billion. Despite a continued decline in revenue, the company returned to GAAP profitability after two consecutive quarters of losses.
Intel’s cost reduction efforts helped it improve its Q2 2023 bottom line. The company expects to generate $3 billion in cost savings this year.
While Intel said that cloud companies are focusing more on getting graphics processors for their AI applications instead of Intel’s central processors, it is confident that in the longer term AI will expand the total addressable market for its server CPUs.
What is the Target Price for Intel Stock?
On July 28,
Truist Financial analyst William Stein increased his price target for Intel to $37 from $32 and reiterated a Hold rating on the stock. The analyst noted that the company reported its second consecutive "good quarter" with its commentary around manufacturing process improvements, new products, and cost-cutting all seen as constructive.
Nonetheless, Stein cautioned that two quarters are still a "fragile trend," and he sees the company’s total addressable market for the company’s X86 to remain challenged over the long term.
Wall Street is sidelined on INTC, with a Hold consensus rating based on five Buys, 19 Holds, and six Sells. The average price target of $36.07 implies 2.7% upside.
Shares have risen 33% so far in 2023.
Advanced Micro Devices (NASDAQ:AMD)
Advanced Micro Devices’
Q2 2023 results beat analysts’ estimates, even as
revenue declined 18% due to persistent weakness in the PC market. Revenue from the data center segment declined 11% year-over-year but was up 2% sequentially. The growth compared to the first quarter was a result of the accelerated adoption of Intel 4th Gen EPYC CPU, with revenue nearly doubling sequentially due to robust demand in the cloud market.
During the
Q2 earnings call,
AMD CEO Lisa Su said that 30 new AMD instances were launched in the cloud in the second quarter, with multiple Genoa processor instances announced by Amazon’s (
NASDAQ:AMZN
) Amazon Web Services, Alibaba (
NYSE:BABA
), Microsoft (
NASDAQ:MSFT
), and Oracle (
NYSE:ORCL
). Overall, the company expects its EPYC revenue to grow by a double-digit percentage sequentially in Q3 2023, driven by the robust demand for the 4th Gen EPYC CPU.
While AMD’s Q3 2023 revenue guidance fell short of expectations, it remains confident about the road ahead. With regard to the opportunities in generative AI, the company said that customer interest in its MI300A and MI300X GPUs is very high. AMD sees a multibillion-dollar growth opportunity in AI across cloud, edge, and other endpoints. For instance, in the data center space alone, AMD expects the market for AI accelerators to reach over $150 billion by 2027.
Is AMD a Buy, Sell, or Hold?
Following the Q2 print,
Citigroup analyst Christopher Danely upgraded his rating on AMD to Buy from Hold on August 2 and increased the price target to $136 from $120.
Danely had earlier thought that AMD’s AI products would be margin dilutive and investors would be concerned about the stock’s expensive valuation. However, the analyst admitted that he was “wrong on both counts."
Wall Street’s Strong Buy consensus rating on
AMD stock is based on 25 Buys and six Holds. The average price target of $142.38 implies nearly 23% upside.
Shares have rallied 79% year-to-date.
Qualcomm (NASDAQ:QCOM)
Qualcomm’s fiscal
third-quarter earnings surpassed the Street’s expectations, but Q3 revenue and a weak outlook for the fiscal fourth quarter disappointed investors. The company’s high exposure to the slumping handset market adversely impacted its
Q3 FY23 revenue, which declined 23% year-over-year to $8.5 billion.
Moreover, Qualcomm expects Q4 FY23 revenue in the range of $8.1 billion to $8.9 billion, reflecting a year-over-year decline in the range of about 22% to 29% due to macroeconomic pressures, weak mobile devices market, and channel inventory drawdown.
Looking ahead, the company believes that it is uniquely positioned to capitalize on the upcoming on-device Gen AI opportunity. The company claims that its AI technology is highly differentiated, backed by high-performance, low-power heterogeneous computing across its central processing unit (CPU), graphics processing unit (GPU), and neural processing unit (NPU) offerings.
What is the Forecast for Qualcomm Stock?
On August 3,
Deutsche Bank analyst Ross Seymore downgraded Qualcomm from Buy to Hold and lowered the price target to $120 from $130. The analyst contended that the continued headwinds that the company is facing in the Handset segment raise concerns that the issues are not just cyclical but structural as well.
In contrast,
Piper Sandler analyst Harsh Kumar reiterated a Buy rating on QCOM and said that the company does not seem to be losing market share but is just stuck in a tough handset market.
With 13 Buys and five Holds, Wall Street has a Moderate Buy consensus rating on Qualcomm. The average price target of $136.75 implies 12.6% upside.
Shares have risen 10.5% so far in 2023.
Conclusion
Wall Street is highly bullish on Advanced Micro Devices and sees higher upside potential in the stock compared to Intel and Qualcomm. Aside from analysts, hedge funds are also optimistic about the stock and increased their holdings in AMD by 430,000 shares last quarter. As per TipRanks’ Hedge Fund Trading Activity Tool,
the Hedge Fund Confidence Signal is Positive on AMD.
Disclosure